My dad would like some photo-editing software for Christmas and his one requirement is that it has a water color filter. Personally, I would prefer to get him Lightroom 3 over the other products because it seems to have a lot more versatility for actual high quality photo-editing, but I don't know if a water color filter is available for this product.

Lightroom does not have "filters" in the sense that Photoshop and Elements do. What you want to achieve, I think, is add an effect that makes the image look like a watercolor painting.

You might be able to find a preset that would do it but I think to be able to do what your father wants, you need to get a program that allows for adjustment of the effect to their taste. For that, I would go with Photoshop or Elements. Since all he wants is the one feature, Elements is the least expensive way to go and the easiest to learn.

If he has a basic editing program already, you might take a look at Virtual Painter. It is very simple, but effective and fun. Corel Painter is a good painting program too. Does he have a need for an orgainzer for his photos? Check out FastStone Image Viewer for a good free option for someone who may not need all of the functions of Lightroom.